Massachusetts Payday Loans
Massachusetts does not prohibit payday lending. The high annual percentage rate that is charged for what is called “payday loans” is why it is illegal in Massachusetts. A license must be obtained for any individual or company that engages in small-dollar lending in Massachusetts.
What are payday loans?
These loans are short-term personal loans that can be repaid quickly. The method of repayment for the borrowed amount and any additional fees is determined by a number of factors. These loans can also be known as cash advance loans or check advance loans.
The cost of payday loans
Payday loans are very expensive because they are short-term. Payday loans have an average annual percentage rate of more than 500%.
Payday loan repayment
You agree to let the lender take money from your bank account in exchange for a loan. The loan amount and fees must be paid in full within 14 days. Lenders will let you continue the loan if you do not have enough money to repay the loan in full by the due date.
Payday loans can be risky
Many payday loans can be accessed online and require access to your bank account. Many internet-based payday lenders don’t give much information about their customers. They might use multiple web addresses and names.
You can only contact some payday lenders via e-mail and toll-free telephone numbers. Without information about the location of the lender, it can be difficult to locate them.
Payday loans can also lead to identity theft. This especially happens if you apply for payday loans with lenders who share customer information with third parties.
alternatives to payday loans
You should consider other options before you decide to take out a payday loan.
Ask your bank or credit union for short-term loan options
A traditional short-term loan from a bank or credit union is usually cheaper than a payday loan. You can interact with representatives of the institution, which reduces risk.
A credit card can be used to get a cash advance
A cash advance is less expensive than payday lending, even though it comes with fees.
Ask your employer to give you a raise on your salary
Find out if you are allowed to defer paying a non-interest bill. Utility bills are also non-interest bills. Set up payment arrangements with your utility company.
Ask your creditor to extend your payment terms or to modify your terms
Confirm with the lender whether they charge for this service, including a late fee, extra finance charges, or a higher rate of interest.
Contact a local accredited credit counseling agency
Counselors can help you get out of debt and prevent predatory loans.
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